Why you should care
Hollywood’s complicated birth may be a preview of the future of filmmaking.
The story of Hollywood would not make a very good movie. Sure, there are courtroom dramas, moments of inspiration, broken dreams and a protracted chase scene across the country. But a happy ending is not guaranteed, and you have no idea who to root for, since there are no heroes, only a seemingly endless parade of stock villains.
The plot opens in New Jersey, where a young Scottish inventor named William Dickson, with only a little guidance from his employer, Thomas Alva Edison, developed the first cinematic projector called the Kinetoscope in 1892. Naturally Edison was listed as the inventor on the patent and reaped the benefits, leaving Dickson to seek his fortune in soft-core, hand-cranked peep-show machines that allowed viewers to watch women undress for a nickel.
Hollywood was born thanks to a cavalcade of pirates, monopolists, lawyers and artists making their way west.
Edison, as shrewd a businessman as he was an inventor, came to own most of the patents related to motion-picture cameras and launched a barrage of patent infringement suits against independent filmmakers who tried to compete with his company, Edison Studios.
In December 1908, the Wizard of Menlo Park took the next step in consolidating his empire by assembling the heads of his rival film companies and proposing that they join forces in an oligopolistic venture called the Motion Picture Patents Company (MPPC). This entity would hold collectively owned film-production patents and would issue licenses to any film producer, exhibitor or distributor who dared to deal in moving pictures.
In 1908, silent films were more popular than Jesus, with about 14,000 drop-in nickelodeon theaters sprouting up around the country. But the rigid production scheme set up by Edison’s new cartel threatened to kill independent film producers, not to mention exhibitors wishing to show fare other than what Edison and his partners were peddling. Of course, most of these “independent” film producers — some of whom would become major studios like Universal, Paramount and Warner Bros. — were no better than a band of outlaws themselves, using pirated equipment, refusing to pay licensing fees, freely adapting novels and plays for the screen and generally creating their own black market for content — not unlike the digital pirates condemned by studio titans today.
Once Edison and the MPPC started enforcing their patent portfolio (289 legal filings were lodged against Universal alone), independent filmmakers began to look for new, less hostile surroundings. Southern California was not only a safe distance from Edison’s base on the East Coast, it also offered a more hospitable climate, including lush weather, diverse landscapes for filming and, most importantly, federal courts less inclined to enforce patent rights.
And that is when the studios moved and Hollywood was born. Edison’s henchmen pursued them for a while, but in 1915 a federal court ruled that the MPPC had violated the Sherman Antitrust Act and ordered the monopoly to disband.
So, the good guys won? Well, the story doesn’t end there, and the studios that were desperate to escape Edison’s oppressive hand became the industry’s dominant players, so much so that by 2012, only seven film producers accounted for 87.9 percent of the worldwide market share.
Perhaps the real ending to the story, and to Hollywood itself, is still to come. A great deal was made of the plight of the visual effects industry at this year’s Academy Awards, where the big winner in the VFX category was Life of Pi, a film starring a remarkably realistic, digitally created tiger. Rhythm & Hues Studios, the 26-year-old company that created the images in Pi, filed for bankruptcy just eight days after winning the Oscar, and the American VFX industry has been hemorrhaging jobs overseas, thanks to the generous tax incentives offered by countries like New Zealand and Canada and the cheap labor supply in places like China.
Perhaps the real ending to the story, and to Hollywood itself, is still to come.
With the dramatic increase in the use of CGI and visual effects in the current crop of Hollywood blockbusters, could the heart of the industry shift overseas? Will the greater use of CGI, combined with the growing foreign movie market and the studios’ zeal to improve production efficiencies, lead to Hollywood’s gradual demise? The locus of power may remain (with most of the money and talent) in Hollywood for the foreseeable future, but with China already set to become the world’s largest film market by 2020, and several studios relocating projects and production companies to take advantage of that trend, it might be that the film industry is on the verge of a new migration.
Will the movie industry relocate westward once more if China’s imagination (and copyright laws) can follow its manpower, customers and capital? That seems unlikely, but then again, who would have imagined a century ago that Southern California’s citrus groves and barley fields would house the world’s dream-makers in 2013?
Thomas Edison certainly didn’t — and he had a better imagination than most.